Any Fiscal Cliff Deal Would Have Sent the Markets Soaring This High

The contentious fiscal cliff deal struck Tuesday night sent stock markets, here and abroad, "climbing", "surging", "rallying," and "soaring" on Wednesday. Which confirms the importance of striking a deal — any deal! — in the first place.

The market's big escalation, [investors] said, was driven not so much because investors love the budget deal that Republicans and Democrats hammered out, but because they're grateful there was any deal at all.

"Most people think that no deal would have been worse than a bad deal," said Mark Lehmann, president of JMP Securities in San Francisco. He called the current package "not too Draconian."

Remember: a significant portion of the fiscal cliff drama was widespread uncertainty over the ability of the White House and Congress to actually build and pass a bill that would address all the big important things that the fiscal cliff would have ushered in: a tax hike, and deep cuts to elements of the social safety net, like unemployment benefits. That uncertainty only intensified when, a few days before Christmas, Speaker John Boehner failed to collect enough votes among his own party's members to pass his "Plan B" bill. The stock market isn't reacting to the particulars of the bill — plenty of those big important things remain up in the air — but the fact that our political system managed to pass it.

This article is from the archive of our partner The Wire.

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